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18 Cards in this Set
- Front
- Back
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Affiliated Group
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A parent corp and all of its subs that are atleast 80% owned by parent and other related subs.
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Includible Corporation Requirement
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All corporations are includible except:
1. Corps exempt under Sec. 501 2. Insurance companies subject to Sec. 801 3. Foreign Corporations 4. Regulated investment companies 5. Real Estate Investment Trusts 6. S Corps |
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Consolidated Return Year
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A corps tax year for which it files a consolidated tax return with other members of the affiliated group
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Separate Return Year
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Corp's tax year for which it files a separate tax return or joins on a consolidated tax return
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Termination of Consolidated Tax Return Filing
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Once affliated group has elected to file a consolidated tax return, it must continue to file consolidated unless IRS grants permission for it to file separately
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Accounting Methods for Each Group Member
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Each corp can have its own accounting method
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Intercompany Transaction
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Transcation between two corps that are in the same consolidated group after transaction
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Combined Taxable Income
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Combine the members separate taxable incomes and loses.
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Consolidated Taxable Income
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Combined Taxable Income +/- Adjustments that are computed on a consolidated basis
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Matching Rule
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Requires consolidated group to take into account an intercompany item in manner that produces the same result as if the transaction were between divisions of one company
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Acceleration Rule
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Requires that the consolidated group take into account intercompany item before the first time it becomes impossible to apply matching rule.
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Items Computed On A Consolidated Basis
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1. Charitable Contribution Deduction
2. Net Sec. 1231 Gain/Loss 3. Capital Gains and Losses 4. Dividends Received Deduction 5. US Productions Activities Deduction 6. Regular Tax Liability 7. Corporate AMT 8. Tax Credits 9. Estimated Tax Payments |
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Capital Gains and Losses Calculated on Consolidated Basis
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Limited to departing members capital losses and SRLY limitation
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Dividends Received Deduction on Consolidated Basis
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Unused portion will go to member leaving the group
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NOL Advantage
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NOL can only offset income while they are in the group. Also a corp entering consolidated group can use NOL from prior years for group.
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SRLY Rule
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SRLY generally is any separate return year
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Consolidated Sec. 382 Rules
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When a consolidated group acquires a corp with unused NOL. 50% stock change needed.
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Stock Basis Adjustments
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Consolidated member must annually adjust the basis of stock it owns in sub for sub's profit and loss
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